Facebook has received a round of capital injections that value it at $50 billion (£32.2 billion).
The new valuation, calculated from $500 million of new investments, makes it worth more than Yahoo or Time Warner.
It is also double the valuation reached in late summer when Facebook listed some stock privately on secondary markets.
Goldman Sachs and Russian investment firm Digital Sky Technologies are among the companies injecting funding into the social networking site.
Goldman Sachs is investing $375 million, according to sources close to the deal quoted by the Financial Times, and is understood to be attempting to raise an additional $1.5 billion from outside investors.
In spite of Facebook’s high valuation, the firm has yet to disclose a profit. But its 500 million users, many of whom willingly disclose personal information on their pages, are seen as a gold mine for advertisers.
Mark Zuckerberg, the site’s founder, owns approximately 25 percent of the stock. He has an estimated $7 billion fortune, which would potentially nearly double if he were to sell his stock at the new price.
A Microsoft executive, speaking at a technology conference in Paris in December, confirmed the software giant made a failed $15bn bid to buy Facebook three years ago